Josh Archambault: Paternalism Undermined Mass Health Reform Law

One of a series of analyses on the 10th anniversary of the 2006 Massachusetts health care overhaul. Josh Archambault is a senior fellow at the Pioneer Institute and is co-author and editor of "The Great Experiment: The States, The Feds and Your Healthcare," a comprehensive review of the Massachusetts state law. He also served in the Romney administration.

An honest assessment of the Health Connector reveals an entity quite unlike Gov. Mitt Romney’s original vision. He proposed a statewide health insurance exchange that would offer small businesses a robust selection of plan choices and designs. Instead, a number of the Connector’s early implementation decisions set a trajectory that has failed to attract those who don’t receive a taxpayer-funded subsidy.

Josh Archambault (Courtesy)
Josh Archambault (Courtesy)

Romney’s Original Vision

Romney’s proposal provided for defined employer contributions, meaning an employee would be given a set amount of money to purchase whatever exchange insurance they deemed the best fit. It also envisioned a “premium aggre­gator” function that, for example, tapped into employer contributions from both a couple’s employers. The design was informed by survey data show­ing that over three quarters of the commonwealth’s uninsured were employed – a majority working full-time – but their employers were struggling to afford health insurance coverage.

The proposal was market-oriented and consumer-centered; intended to promote personal choice and ownership of portable health insurance for small business employees.

Such a set up would streamline the administrative burden and limit minimum participation and contribution hurdles that had prevented many businesses from offering coverage. Instead, the Connector set up a program that maintained many of the barriers the Romney administration had identified as problems before the law’s passage.

Early Policy Decisions Moved Connector Toward Costly Paternalism

"Much more work will be needed for the Health Connector to live up to the promise set out in the 2006 reform."

Josh Archambault

The original proposal called for benefits that focused on value: preventive and primary care, emergency services, ambulatory patient care, mental health and surgical and hospitalization benefits. But the Connector board approved “minimum creditable cov­erage” that looked more like costly “Cadillac” coverage offered in other states. They then created tiers (Gold, Silver and Bronze) that limited the diversity of offerings. Instead of giving consumers tools to decide which plan was right for them, they simply prohibited most options.

These decisions made the Connector into a health insurance sales channel that is largely indistinguishable from the general marketplace, thereby limiting its appeal to small business owners. This largely remains the case today.

Small business is clearly shopping elsewhere. As of this March, the Connector served just 1,246 groups and 5,741 members. Some of the Connector board’s rhetoric has changed with new appointments by Gov. Charlie Baker, but much more work will be needed for the Connector to live up to the promise set out in the 2006 reform. In the meantime, small business will continue to face crushing premiums.


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